- Study from Korn/Ferry International Examines Link Between Military Experience and CEOs -
Los Angeles, June 16, 2006 – Companies led by CEOs with military experience have outperformed the S&P 500 Index over the past three, five and 10-year periods by as much as 20 percentage points, according to a study by Korn/Ferry International (NYSE:KFY), a premier global provider of talent management solutions.
Published by Korn/Ferry in cooperation with the Economist Intelligence Unit, “Military Experience & CEOs: Is There a Link?” also found that CEOs with military experience tend to last longer in the job. CEOs with military experience have an average tenure of 7.2 years, while CEOs without military experience have an average tenure of 4.6 years.
The study found that the 59 companies on the S&P 500 headed by CEOs with military experience provided an average annual shareholder return of 21.3% over the three-year period ending September 2005, versus 11.0% for the S&P 500 Index during the same time. For a five-year period, the ex-military CEOs provided a 9.5% return while the Index provided a -10.7% return, and for a ten-year period, the ex-military CEOs provided a 12.2% return versus a 9.4% return for the S&P 500 Index.
Featuring both a quantitative analysis of companies in the S&P 500 led by CEOs with backgrounds in the U.S. military, as well as qualitative in-depth interviews from four ex-military CEOs – Clayton Jones of Rockwell Collins; Michael Morris of American Electric Power; Michael Jordan of Electronic Data Systems; and Steven Loranger of ITT Industries – the study suggests that deft management of stressful situations during real-world military operations may well enhance performance in a corporate environment.
“There are clearly certain traits CEOs possess that drive their approaches to leadership, communication and, perhaps most importantly, the ability to translate company vision into tangible results,” said Joe Griesedieck, vice chairman of Korn/Ferry International and head of the company’s CEO Practice. “While we don’t necessarily believe that one must obtain military experience to become a successful CEO later in life, it is evident that the leadership skills acquired during military training can absolutely enhance one’s chances for success in corporate life.”
Methodology - About the Study
The research was conducted using publicly available information on the CEOs of all Standard & Poor’s 500 companies, including the publicly available biographies of all CEOs of S&P 500 companies, biographies available on the Hoover’s business database and Who’s Who in America. In addition, the authors contacted the individual companies to find out more details about military service, branches of service, combat experience and other information.
About Korn/Ferry International
Korn/Ferry International, with more than 70 offices in 40 countries, is the premier global provider of executive search, outsourced recruiting and leadership development solutions. Based in Los Angeles, the firm partners with clients worldwide to deliver unparalleled senior-level search, management assessment, coaching and development, and recruitment outsourcing services through its Futurestep subsidiary. For more information, visit the Korn/Ferry International Web site at www.kornferry.com or the Futurestep Web site at www.futurestep.com.
About the Economist Intelligence Unit
The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through a global network of over 500 analysts, the Economist Intelligence Unit continuously assesses and forecasts political, economic and business conditions in 200 countries to help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.